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TCPA RIP?

The outcome of the 2016 presidential election has left many prognosticators scrambling to figure out the policy implications of the incoming Republican change in administration. Among countless other things, companies affected by the Telephone Consumer Protection Act (TCPA) should consider whether the upcoming shift in political power signals a possible death knell for the statute, perhaps a body blow, or perhaps neither. Although reading the political tea leaves in 2016 has proven to be a fool’s errand, there are two ways in which the TCPA may be impacted in the near future.

Shift in Power at the Federal Communications Commission

The five-member Federal Communications Commission (FCC) must by statute consist of at least two members of each political party. Currently, there are three Democratic commissioners and two Republican commissioners, each appointed to a five-year term. On April 10, 2017, Democratic Commissioner Jessica Rosenworcel’s term will expire, allowing President-elect Donald Trump to select a Republican commissioner, thus changing the FCC’s balance of power.

The potential significance of the upcoming shift at the FCC is perhaps most evident in the Republican Commissioners’ dissents to the FCC’s Omnibus Order of July 2015. In the wide-ranging Order, the FCC made several findings about which Commissioner Michael O’Rielly, in particular, vehemently disagreed. The issues that could be revisited by a Republican-controlled FCC include:

Whether the TCPA covers text messages, which did not exist when the TCPA was enacted in 1991.

The current broad definition of auto-dialer, which now includes equipment that merely has the “capacity” to dial from a list of numbers, instead of equipment that was actually used to dial numbers automatically.

Limiting companies to one call to a reassigned number before allowing the subscriber to that number to file a TCPA complaint. Under the current rule, the subscriber to the number has no obligation to alert the caller that the intended recipient is no longer the subscriber, and callers often have no way to know that the dialed number no longer belongs to the original subscriber they were trying to reach.

The absence of a safe harbor for companies that have attempted in good faith to validate that they are calling the correct numbers.

The FCC’s current refusal to define the “called party” as the “intended recipient.”

Many of these points were raised in a consolidated appeal of the July 2015 Order filed by several companies and the U.S. Chamber of Commerce to the U.S. Court of Appeals for the D.C. Circuit. Oral argument in ACA International v. FCC was heard on October 19, 2016. The D.C. Circuit could vacate much of the July 2015 Order and/or remand to the FCC for revisions. If the FCC were to reverse course on only a few of the key holdings in the July 2015 Order, the change in the law and its impact would be dramatic.

Given the April 2017 expiration of Commissioner Rosenworcel’s term, the best hope for companies seeking changes to the TCPA lies with the FCC, but Congressional amendments to the TCPA are also within the realm of possibility.

Congressional Amendments to the TCPA

The TCPA is generally considered a popular, pro-consumer statute, and even its critics agree that it deters and prevents unwanted calls, texts, and faxes. It is, therefore, unlikely that the TCPA, which was enacted 25 years ago, will be entirely overturned by Congress. That being said, calls to amend the TCPA to reflect changing technology and increasingly enormous class action settlements have been growing.

On September 22, 2016, the House Energy and Commerce Committee’s Subcommittee on Communications and Technology held a hearing titled “Modernizing the Telephone Consumer Protection Act.” The hearing was applauded by the Democratic Ranking Member of the Subcommittee, indicating bipartisan support for amending the TCPA on some level. As Subcommittee Chairman Rep. Greg Walden (R-OR) noted:

We all share the goal of preventing harmful phone calls, but it is increasingly clear that the law is outdated and in many cases, counterproductive. The attempts to strengthen the TCPA rules have actually resulted in a decline in legitimate, informational calls that consumers want and need.

Although the September 22 hearing has not yet resulted in any concrete next steps for amending the TCPA, the possible ways in which a Republican Congress could amend the law include a limit on statutory damages similar to the Truth in Lending Act’s statutory cap of $500,000, or an updated version of the law to reflect the seismic changes in technology since 1991.

Whether the FCC or Congress (or both) takes action, it is increasingly likely that the TCPA will undergo some type of transformation in the upcoming presidential term. The scope and nature of that change, like so much else relating to the new administration, remains to be seen.

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